$Simpson Manufacturing (SSD.US)$ **Simpson Manufacturing (SS...

**Simpson Manufacturing (SSD) ** is an American company listed at $11.5 in 1994. The current price is 103.28. There were two splits in 2002 and 2004, and the average return over 28 years was 13.6%, which is amazing.

Over the past 5 years, gross margin declined from 45.7% to 43.3%, then rose to 48%, and the return on net assets gradually increased from 10.6% to 24.6%.

Revenue, operating profit and net profit have continued to grow over the past 5 years. The average net profit growth rate was 24%. In particular, the growth rates in the past two years have reached 39.6% and 42.5%. Growth continued in the first two quarters of 2022, with increases of 43.4%, 58.4%, and 53.1%, respectively. Considering the large cycle of the real estate industry, we should be wary of the sustainability of current profit growth.

The income statement shows that interest expenses have gradually increased to 3.66 million, accounting for 1% of operating profit, and the burden is extremely light.

Over the past 5 years, the balance sheet has gradually risen from 14.7% to 20.2%, soared to 46% in 202Q1, and recently increased to 48.3% in 2022/Q2.

The balance sheet shows that accounts receivable increased by 66 million and inventories increased by 160 million yuan in 2021, while net profit increased by only 79 million yuan in that year, indicating that profits went into accounts receivable and inventory, and cash flow was not good. Receivables and inventories increased by 50% and 74% respectively in the first two quarters of 2022, and cash flow has not improved.

Judging from absolute values, inventory is currently slightly less than a quarter's revenue. Receivables correspond to 60% of quarterly revenue, which is quite normal.

Goodwill increased from 160 million to 850 million in 2022 Q2, accounting for 66% of net assets of 1,285 million dollars. Long-term loans increased to $670 million in 202Q1, accounting for 52% of net assets. Long-term loans are probably equal to the goodwill of the company, that is, the premium paid to buy the company.

Changes in the balance ratio in 2022 have led to a significant increase in the company's leverage ratio, which will have an essential impact on the company's future performance.

The net operating amount of cash flow over the past five years was far higher than the net investment amount, and there was a lot of shareholder surplus, but the net operating amount declined significantly in 2021.

Currently, the price-earnings ratio is 17, and the price-earnings ratio is TTM13.5. Considering the rapid growth of the company's net profit and the contraction of actual net operating amount, combined with industry cycle considerations, it can only be arranged in a small amount (⭐️)